Quality of care problems have persisted for decades within nursing homes caring for Medicaid beneficiaries. Previous research has attributed these problems in part to certificate-of-need (CON) laws and construction moratoria, which are designed to control government expenditures by limiting the number of nursing home beds in an area. Such policies create barriers to entry and can result in excess demand for Medicaid funded nursing home care and therefore limit competition on the basis of quality. In markets with excess demand for care, an increase in the level of Medicaid reimbursement has not been found to improve the quality of care. However, declines in recent bed occupancy trends suggest the overall effect of CON and moratoria regulations may be lessening within markets for nursing home care. Indeed, more recent studies have found a modest positive relationship between Medicaid reimbursement rates and quality. A common limitation across previous studies of nursing home quality is the lack of resident-level data needed for adequate risk adjustment of quality measures. Any relationship between reimbursement rates and quality (positive or negative) may be masked or distorted in the absence of risk-adjusted quality measures. We propose to examine the effect of Medicaid reimbursement rates on nursing home quality in the context of CON/moratoria policies using risk-adjusted quality measures (outcomes and staffing) from every nursing home in the United States. By merging data from the Minimum Data Set (MDS), the Online Survey, Certification and Reporting System (OSCAR) and the Area Resource File (ARF), the proposed study will greatly increase our understanding of the role of Medicaid reimbursement and CON/moratoria policies in encouraging the provision of high quality care in nursing homes.